Payment Acceptance Cost:A Corporate Journey

The beginning and progress of our continuing journey

Patti Ritter, CPA, CTPSenior Treasury Operations ManagerPatti has worked on payment-related initiatives throughout her career at Republic Services. After an initial career in public accounting, she worked in banking for 15 years in accounting, lending, and consumer loan product development and project management. She has spent the last 13 years in corporate treasury, focused on special projects.

Jeff Morley, CFPDirector, Customer ExperienceJeff is a seasoned customer experience leader, having served in senior call center and investment advisory leadership positions for a major financial services firm for over 20 years. He joined Republic Services two years ago as Director of Customer Experience as part of Republic’s strategic initiative to become a truly customer-centric organization. He holds a BA in Economics from Virginia Commonwealth University and is a Certified Financial Planner (CFP).

Presenters

Agenda•Our Journey

−How we started

−Analysis of situation

• Finding Solutions−Solutions considered

− Influencing the customer

− Influencing the field

−Corporate-level solutions

•Republic Services is an $8.5 billion company operating in 40 states

•Second largest provider of domestic non-hazardous recycling & waste solutions

•We are not a utility, but operate under many municipal contracts

Introduction

• 339 collection operations

• 198 transfer stations

• 190 landfills

• 62 recycling centers

• 71 landfill gas and renewable energy projects

Lines of Business

Payment Channels

•Numerous payment channels to accommodate the diversity of our customer base• Process 2.2 million payments per month

Payment Methods• Accept payments by cash, checks, credit cards and consumer and business electronic payments

•Overall, lockboxes take most payments

The beginning of the journey

•Due to increasing payment acceptance cost, we began a deep dive into payment costs in early 2012

• Analyzed trends in payment methods, channels and payment costs by channel

• Trend is to OBP payments and more credit card payments

The beginning of the journey

Initial hypothesis: the volume of credit cards in our online bill pay channel and resulting cost was our primary issue

•As we began digging deeper, we found the answer wasn’t that simple

•We stratified payments by payment amount and consumer vs. business

Analysis

• We are benefiting from Durbin rates on debit cards

• A disproportionate amount of our cost is from large governmental and business payments by credit card

Analysis

• Listen to all ideas

• Other billers shared their own efforts to reduce payment costs

• Service providers offered insight into their client’s efforts

Exploring for solutions

• A payment industry consultant helped us focus our analysis of costs and potential solutions

• Consulted internal resources from customer experience and IT

• Constraints with IT resources

Exploring for solutions

•One major focus was on how solutions might impact the customer experience

•Concern from senior management about negative customer reaction and potential defection to the competition

•Customer segments

Solutions Evaluated

Market reality: credit card companies are aggressively marketing purchasing cards to governmental and business customers

Solutions Evaluated

Not considered for the near term

•Discontinuing credit card acceptance

• Implementing a fee for credit cards, or for CSR, IVR or one-time payments

• CSR incentives to sign up customers for recurring ACH

• Customer rewards and cash discounts

Solutions Shelved

Influencing the Customer

Revise OBP pages to make ACH the default payment method

Improve web site “Pay Your Bill” page

Promote bill-pay and recurring ACH payments in a variety of customer communications

Influencing the Field

Allocate credit card fees to divisions based on actual cost

Provide reports to the field of customers making large credit card payments

Set up a process to give feedback on major customer bids

Corporate Initiatives

Implemented Level 3 credit card data, which qualified us for lower fees on corporate purchasing cards

Suggested invoice messages provided to field

Awareness messages

•Ongoing process

•What’s up next?

Share your feedback!

Patti Ritter pritter@republicservices.com

Jeff Morley

jmorley2@republicservices.com

The Journey Continues